October 2, 2005

Published Patent Tripe

In another era, a nation's most valuable assets were its natural
resources — coal, say, or amber waves of grain. But in the information
economy of the 21st century, the most priceless resource is often an idea,
along with the right to profit from it.

Poetic, and probably untrue. Prove me wrong, but I suspect that revenues from
patented technologies outpaced natural resource revenues even in the 19th
century, and most certainly in the 20th century.

Patents ''are becoming the highest-value assets in any economy,'' said
Jerry Sheehan, an economist with the Organization for Economic Cooperation
and Development in Paris.

Jerry was being a bit first-world here in overstatement. Patents aren't that big yet in
Botswana, or even Saudi Arabia, for that matter.

At a time when many of their most valuable assets can be shared and
exchanged easily, businesses and governments scrambling to redefine who owns
what.

The battles pit companies against companies, creators against
distributors, almost everyone against the United States — and, some say,
China against the rest of the world.

Jimmy, always with the drama.

Some intellectuals say that the more such rights are expanded, the less
good the public reaps, a benefit that government's protection of innovation
once intended.

''In certain cases,'' said Elsa Lion, an analyst at the London research
firm Ovum, ''technology companies are beginning to realize they have more to
gain by releasing patents to the general public than by hoarding licensing
income.''

By giving away some of their knowledge, companies like IBM and Nokia are
not just polishing their image among the Internet generation.

Jimmy buys into the public relations stunt. IBM gleans more than $1.5 billion
a year from patent licenses.

If savvy entrepreneurs can manipulate the system by locking down valuable
ideas, true pioneers will find it too tough to win rewards for their
inventions.

''Our standards-setting process risks being corrupted by having people
filing for, and getting, any patents they want. That poses a real danger to
the effectiveness of innovation,'' said Josh Lerner of Harvard Business
School.

Josh is joshing about people filing, and getting, any patents they want. If
you don't believe me, try it some time. And what exactly is "the effectiveness
of innovation"?!

And patent offices worldwide, overwhelmed by new applications, are under
growing pressure to cut backlogs by using hasty assessments, creating the
conditions for what Harhoff called ''a vicious cycle of deteriorating
quality.''

More unsubstantiated assertion, and more drama - note that it's a
non-sequitur to have a "vicious cycle" of "deteriorating quality"; wouldn't it
be a "vicious slide", and when was sliding ever vicious?

Critics say the skyrocketing volume of patent applications makes it
increasingly difficult to assess whether the underlying ideas are valuable,
nonessential or even valueless. Critics also say the current system
encourages using the courts to sue other firms for using ideas you
registered first.

Using the courts to sue; that's novel. Those wily critics seem to miss that
infringement damages may be determined through adjudication, hence "using the
courts".

''Today's collaborative technologies are presenting a real challenge for
patent law,'' Jaffe, the patent expert, said, ''and for the kinds of
thinking that emerged at the time of Thomas Edison and Alexander Graham
Bell, when individual inventions seemed much more distinct, much less
complex."

Another non-sequitur. Its seem ominous, but why would collaborative
technologies present a patent statute challenge? Mr. Jaffe appears ignorant of
patent history. Thomas Edison only had 1,073 lifetime patents because of
incremental innovation; i.e, not so distinct. As to new technology becoming more
complex, how about stating the obvious of a historical continuum.

''As a result, we are moving into a world where patent holders won't be
islands anymore, but knowledge-sharing organizations.''

Apparently, inventors are subject to some hitherto unknown geologic force,
and cloning will turn individuals into altruistic groups.

Like any other form of property or asset, patents can be bought, sold,
leased or mortgaged. Businesses even give patents back to the government in
exchange for tax breaks. Start-up companies use patents — often their only
collateral — to lure investment from venture capitalists. Midsize businesses
swap and barter patents, even with rivals, to build products they could not
make on their own. And many companies license patents to bolster their
balance sheets.

Wow. Sounds like patents could be a smart business tool. How did that creep
in? Oh, the illusion of "fair & balanced".

Posted by Patent Hawk at October 2, 2005 10:41 PM
| Patents In Business